How to Maintain a Fixed Asset Register Under Companies Act 2013
Published: April 4, 2026
Every company registered under the Companies Act 2013 is expected to maintain proper records of its fixed assets. In practice, many organisations — especially in the SME segment — maintain asset records in Excel spreadsheets that gradually become incomplete or inconsistent. This article walks through what a structured fixed asset register looks like, what the Act and related standards expect, and where common gaps appear during audits.
1. What the Law Expects
The Companies Act 2013 addresses fixed assets through multiple provisions:
- Section 123(2): Depreciation must be provided in accordance with Schedule II before declaring dividends.
- Schedule II: Prescribes useful life for various asset categories. Companies may use rates based on useful life or adopt rates that result in the same pattern of depreciation.
- Section 128: Books of account must include records of all assets and liabilities, maintained at the registered office.
- CARO 2020 Clause 3(i): The auditor must report on whether the company maintains proper records showing full particulars, including quantitative details and situation of fixed assets, whether physical verification has been conducted at reasonable intervals, and whether any material discrepancies were noticed.
Accounting Standard 10 (AS 10) and its Ind AS equivalent (Ind AS 16) define the recognition, measurement, and disclosure requirements for property, plant and equipment.
2. Structure of a Fixed Asset Register
A register that supports these requirements typically captures the following for each asset:
| Category | Fields |
|---|---|
| Identity | Asset ID, description, classification (FA / inventory / consumable), serial number, make/model |
| Financial | Cost of acquisition, date of acquisition, depreciation method (SLM or WDV), depreciation rate, accumulated depreciation, written-down value |
| Location | Department, building/floor/room, custodian, physical tag ID (QR or barcode) |
| Lifecycle | Useful life (per Schedule II or company policy), date put to use, disposal date and method, disposal proceeds |
| Compliance | GST input credit claimed, HSN/SAC code, capitalisation voucher reference, depreciation FY snapshot |
3. Depreciation Methods — SLM vs WDV
Schedule II of the Companies Act 2013 prescribes useful life for different categories of assets. Companies may choose either the Straight Line Method (SLM) or the Written Down Value (WDV) method.
Straight Line Method (SLM)
Depreciation is charged uniformly over the useful life. If a computer has a useful life of 3 years, the annual depreciation is approximately 33.33% of cost. This method is simpler to apply and results in equal charges each year.
Written Down Value (WDV)
Depreciation is charged on the reducing balance. The rate is higher in early years and tapers off. Income Tax Act Section 32 uses WDV rates, so some organisations maintain dual depreciation — WDV for tax purposes and SLM for books.
A structured register should support both methods per asset classification, with the ability to lock depreciation for audited financial years while allowing corrections in the current year.
4. Common Gaps Found in Audits
Based on our experience working with organisations on their asset records, these are the recurring issues auditors flag:
- Missing location details: The register shows asset descriptions and costs but not where assets are physically located. CARO 2020 specifically asks about "situation of fixed assets."
- No physical verification trail: CARO 2020 requires verification at "reasonable intervals" (typically once a year). Without a recorded verification — who did it, when, what was found — the auditor has no evidence. See our guide on structured physical verification.
- Stale depreciation rates: Companies continue using old rates without mapping to Schedule II useful life. When Schedule II was introduced (April 2014), many companies didn't re-compute useful life for existing assets.
- Missing disposal records: Assets are physically disposed of but remain on the register at full cost. This overstates the asset base and distorts depreciation. A governed removal process ensures every disposal, write-off, or scrap is recorded with an approval trail.
- No link between procurement and capitalisation: Assets are purchased through a procurement process (PO, GRN) but the register is maintained separately. When the auditor asks for the purchase trail of a specific asset, it requires manual cross-referencing.
- Year-end snapshots missing: Without locking the register at year-end, corrections made in the current year inadvertently change prior-year balances.
5. What a Good Register Enables
When the register is structured correctly, it supports:
- Audit readiness: CARO 2020 reporting requirements are answerable directly from the data — asset-wise details, verification records, discrepancy reports.
- Depreciation accuracy: Year-end snapshots ensure audited periods are locked. Current-year corrections don't affect prior balances.
- Procurement traceability: Each asset traces back to its purchase requisition, purchase order, and goods receipt — a complete audit trail from request to capitalisation.
- Physical verification: QR-tagged assets can be scanned during verification campaigns, producing a systematic record of what was verified, what was missing, and what condition assets are in.
- Tally integration: Capitalisation and depreciation entries can be generated as Tally-compatible vouchers, reducing manual data entry and reconciliation effort.
6. Getting Started
If your organisation currently maintains asset records in Excel or across multiple disconnected systems, the typical path is:
- Audit your current data: What fields do you have? What's missing? Are location details and depreciation rates current?
- Define your classification structure: Map asset categories to Schedule II useful life. Decide SLM or WDV per category.
- Migrate: Import your existing data into a structured register with validation — catch errors before they become audit findings.
- Tag and verify: Generate QR tags for physical assets and run an initial verification campaign to establish a baseline.
- Lock and maintain: Take a year-end snapshot, start the new year on a clean register with proper depreciation schedules.
ProcureTrail supports this workflow — from bulk data migration with validation, to depreciation management with year-end snapshots, to QR tagging and verification campaigns. The register connects back to procurement so every asset has a complete acquisition trail.